Technology could and should be utilised to base car insurance rates around a ‘pay as you drive’ scheme, say experts, instead of the current regime that bases rates around individual drivers and cars. Telematics specialists Cobra remarked that the infrastructure is already set in place, and adopting the new scheme could result in sensible drivers getting much cheaper car insurance bills than they do currently.
A pay as you drive system also has the added benefit of potentially reducing the number of casualties younger drivers encounter, as the technology actively rewards safe driving behaviours, said Andrew Smith, managing director of Cobra UK. Mr Smith added that the technology has the added benefit of tempering younger motorists’ behaviour without restricting their mobility in any way.
Since young motorists would be fully aware that their driving habits were being monitored and then would be directly responsible for their car insurance rates, insurance experts predict that their driving styles would adapt to more sensible ones to save money.
This phenomenon could lead to a decline in motor insurance premiums for young drivers as a result. As young drivers currently pay several thousand pounds in insurance premiums annually, this could prove to be a revolutionary approach, said Mr Smith.
The same problems are being discussed year after year, the managing director said. With telematics technology already in place, accident levels would decline and driving standards would increase as a result, he added.
Driving sensibly would automatically deliver lower premiums to careful drivers through a pay as you drive scheme, Mr Smith also said.